Ratings

Ratings

 

About GFCI

 

GFCI (Global Financial Centers Index) is a specialized methodology of rating of 80 international financial centers (IFC). It was launched in March 2007 and developed by Z / Yen Group Limited, headquartered in London with more than 300 associated experts around world.

FCI is developed for Municipal Corporation of London, the Governor of London city,  as well as for numerous clients and partners of  Z/Yen company  with analyzing and  positioning purpose of London Financial Center alternatively to  MFC.

GFCI report is published every 6 months with quarterly update data activities by Z/Yen specialists.

 

The GFCI index provides MFC ratings calculated using Evaluation model of factors which includes:

  1. Online questionnaire - the foreign professional investor’s responses.

Online questionnaire is regular basis survey of international financial experts and professional investors conducted by Z/Yen team.

Respondents are asked to evaluate the personally known financial centers and also consider the opinion regarding the perceptions of competitiveness of those MFC.

Totally 2786 international financial specialists and professional investors have been interviewed, 25749 evaluations has been collected on financial centers.

 

  1. Instrumental factors (external factors) - a combination of numerous factors which lead the financial centers to competitiveness, grouped in five major areas of competitiveness: Business Environment, Financial Sector Development, Infrastructure, Human Capital and Reputation.

Performance evidence of these areas based on such sources as: Economist Intelligence Unit, United Nations, World Economic Forum and etc.

GFCI uses 102 factors, 37 of which are updated from last GFCI'13. Official information absence on any financial centers and cities negatively affects the evaluation, since these indexes are not included in the rating.

 

Business Environment:

.

The institutional and regulatory framework regulation

The tax regime attractiveness is tax cost competitiveness as income, corporate and investment income tax. Stability and transparency of taxation

The corruption level - political stability,  legislation role and  business integrity

The economic freedom for participants -macroeconomic environment of external relations, access to the international financial markets. Other factors characterizing the simplicity of doing business in the financial centre; stable and predictable environment for doing business

The Financial

Sector Development:

The financial intermediation level - capital availability and customers accessibility

Volume, number, speed and trading costs  of financial instruments (shares and bonds), production volume

The number of financial institutions concentrated in one financial center, employment

The clustering effect -  is a geographical concentration of enterprises  that share common markets, technologies, employee needs, skills and improve performance for national and global levels of competitions as well as for profiled universities and  research institutes

Infrastructure:

The availability of office assessment -  space-lease price,  simplified taxation for rent, commercial real estate quality

The transport infrastructure development of the city, airports and railway stations of international importance landmark

The speed and quality of telecommunications links

The overall level of security – environment care.  Executive and local authorities responsibility and sustainability 

Human Capital:

An availability of qualified staff, culture and knowledge of foreign languages

Staff mobility - the labor market and experience flexibility

The possibility to get business education and development

The quality and level of life

The human capital development in the financial center.  Labour pool in employment – is a kind of list or a group of people which the company expects to hire with no exact arrangements for the 10-15% higher salary than employees on a permanent basis

Reputation:

The factors that indirectly affect the physical location attractiveness in the financial centre – the brand  and popularity of the city

The price level – an inflation impact on the living cost, the variety of pricing in different cities of the country

Economic sentiment of participants - cultural diversity and attractiveness

Quality of life in the financial center -  innovation level, comparative positioning with other centers

 

In addition, the rating considers the 3 key measures which define the financial centre profile on various aspects of competitiveness:

Professionalism – the high potential in such spheres as: investing, banking, insurance, public services and regulation.

The ability to communicate with other financial centers - the degree of fame all over the world, the opinion of non-residents professionals on the cooperation of the financial center with others.

Diversity - versatility of business, the possibility of complex or simple measurability by using combination of indexes.

Types of MFC. In accordance to each of the five key factors of competitiveness MFC analysis divides them into unexpected and stable financial centers.

 

Unpredictable centers have the highest development potential due to their high sensitivity to changes in the instrumental factors, such as Tel Aviv, Rome, Qatar and others.

The stable centers (such as leading MFC: London, Hong Kong, New York, Singapore) have the relatively low sensitivity to changes in the instrumental factors. If the rating of any financial center has considerably changed, even when it has been represented by only one of the five key factors, it can be determined a potential growth trend or decline by financial center rating.

 

TOP 5 of Asian International Financial Centre on the competitiveness factors

(Asia/Pacific) GFCI'14 compared to GFCI'13

 

Rating

MFC

Business environment

Financial sector development

Infrastructure

Human capital

Reputation

Comments

3

Hong Kong

-

-

-

-

(-) 63

Stable MFC, not sensitive to changes of 5 factors

 

4

Singapore

-

-

-

-

(-) 57

Stable MFC, not sensitive to changes of 5 factors

 

5

Tokyo

+2

rose

+3

rose

+1

rose

+1

rose

(+2) 53

Stable MFC, not sensitive to changes of 5 factors

 

10

Seoul

-

+7

rose

-

-

(-) 50

Dynamically developing MFC

 

15

Sydney

-

-

-

 

(-) 32

Stable RFC, not sensitive to changes of 5 factors

 

 

To assess the financial centers attractiveness investors are classified according to their geographic location: Europe, North America, Latin America, Middle East/Africa and Asia/Pacific as well as Offshore. Don't underestimate the geographical regions which assess financial centers.  For example, positive views of North America and Offshore investments led to the unexpected appearance of Tel Aviv straightforwardly on 32nd place. Totally 1592 respondents particularly:

Europe 659, North America 237, Latin America 1, Middle East/Africa 68, Asia/ Pacific 373 and Offshore 244.


If we talk about Kazakhstan and domestic stock market situation, it is known that the State made great efforts to create a competitive financial centre.

In calculation of GFCI index- financial centre of Almaty city is not included yet. However the RFCA is included (1/11) in the 2012 year model interim questionnaire ranking of GFCI (GFCI11.5) "List of prospective financial centers". According to the GFCI'14 rating Almaty is mentioned as recently included city but still not acquired by investors.

In addition, according to the Annual Global City Competitiveness Index 2012 Almaty had the 100 place out of 120 cities while the capital Astana was not included in the rating. According to the Global Competitiveness Index Kazakhstan has the 51st place out of 144 countries over the world in 2012-2013 years.

It is worth noting that the geopolitical position of Kazakhstan has all the prerequisites for pretending the status of capital attraction centre of the RFCA equity in the CIS.

 

 

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Сравнительный анализ Гонконга и Алматы

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